The COVID-19 crisis has now become, for better or for worse, “business as usual”. Despite the recent increase in cases in many parts of the world, the prospect of a vaccine being available in 2021 rightly improves people’s prospects for the future. Over the past few months, we’ve adjusted, cut costs, gone remotely, implemented new technology, bought sanitizers and masks, and reworked supply chains. And now we can start making plans for a world that is not constrained by a pandemic.
One response we noticed during the pandemic, however, is a new kind of corporate fatalism about future crises we would warn about. COVID-19 has blinded even many who thoughtfully engage in enterprise risk management (ERM). Their reaction: “What is it for?” Much of the risk planning, according to the thought, was irrelevant to COVID-19 and could continue to be so in today’s uncertain world. Wouldn’t it be better to just focus on agility?
A successful business will need to do both. Studying the past to quantify and mitigate future risks is critically important, but this traditional type of MRE is most effective when paired with well-thought-out crisis preparedness, cyber resilience, and business continuity planning. There is no substitute for having a team up for the challenge when the unexpected happens.
we described seven key steps to take in a crisis in March to respond to COVID-19 and followed that up with what to do next. Looking back, it’s clear that companies that prepare – and keep their preparation up to date – cope better with the unexpected.
Leadership and agility
The top performers quickly took control of the COVID-19 crisis. They had a strong leader and management team that could collaborate at breakneck speed, even when they didn’t have a clear manual for keeping their staff safe, ordering and distributing laptops, or triage the supply chain. . They were successful because they had trained for or experienced a crisis before and they trusted each other.
Others were less prepared. Quarrels in a company‘s boardroom have delayed key decisions. In another case, executives weren’t sure which employees had laptops or how they were going to ship laptops to those who didn’t at home. HR did not have the employees’ business cell phone numbers and was unsure if it was a privacy breach to ask them for this information (it is not). The first critical weeks were wasted collecting data and consolidating the foundations.
That’s why we always insist on having the right data at your fingertips. Planning scenarios for different types of crises is a good way to gather the data you need. This information allows you to be agile and forward thinking. For example, one company we worked with predicted a supply chain disruption, so when COVID hit, they knew that if the borders closed, they would be able to continue the business because their suppliers weren’t there. concentrated in no country. However, company executives soon realized they had a key vulnerability: a distribution warehouse. They had only one point of failure, despite their best efforts, and they set about changing that immediately.
Rotate or adapt
The ability to quickly change strategy is the product of strong leadership, agile decision-making, crisis planning, and good data. Companies in sectors that require huge capital investments – for example, airlines and cruise ships – may need more help in the form of government support to bounce back, but others may change direction quickly, if necessary, if prepared.
The ability to quickly change strategy is the product of strong leadership, agile decision-making, crisis planning, and good data.
We’ve seen companies active in the surveillance industry switch to employee welfare surveillance, for example, and many commercial real estate companies are now looking to tailor their offerings for social distancing and new approaches to work.
A seizure can be like a workout, to borrow an analogy from Nassim Nicholas Taleb’s book Antifragile. When you lift weights, you create tiny tears in your muscles, which heal stronger and allow you to lift more weight the next time you hit the gym. We are all in a bit of pain now. The fatigue from COVID is real, but the news of vaccines is encouraging, even if the virus does not go away immediately. There will likely be more lockouts and restrictions around the world before the vaccine is widely available, and companies will have to get through the interim period. There are invaluable lessons for leaders to learn and internalize now, as they will help you prepare for any disruption to come.